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What is the cost market of the inventory management system? Thorough explanation of the functions required for the system!

Inventory Management System

By introducing an inventory management system at a company that provides services that handle products, it is possible to prevent human error and provide stable services.
If you are considering introducing an inventory management system, check the cost-effectiveness as well. This time, we will explain the cost, cost-effectiveness, necessary functions, etc. at the time of introduction
to the person in charge who is considering the introduction of the inventory management system.

 

table of contents

  • 1. What is an inventory management system?
  • 2. Stock management system costs and price quotes
  • 3. Minimum items required for inventory management
  • 4. Common functions of the inventory management system
  • 5. How to choose a system company that can be entrusted with the development of an inventory management system
  • 6. Increase efficiency by introducing an inventory management system

What is an inventory management system?

To put it simply, an inventory management system is a system that can manage product inventory information and warehousing/delivery information. It is a business system suitable for companies that operate physical stores and EC sites, including manufacturing and retail industries.

Of course, if there is not enough inventory, we will not be able to offer products to our customers, but if there is too much inventory, we will have to account for it as bad inventory. Proper inventory management can reduce inventory shortages and excess inventory to zero. Recently, inventory management systems have evolved, such as cloud-based systems being created and being linked with other systems to make them easier to use. The functions and types of this warehouse management system are introduced in detail on another page, so if you want to know more about it, please refer to ” What is an inventory management system? Introducing the reasons and types that should be introduced “.

 

Inventory management system costs and price quotes

The cost and price of the inventory management system will vary greatly depending on whether you use custom-made software or packaged software. Custom-made software here means making software that meets the needs of the company from scratch. At the cost of creating a highly customizable system that fits the enterprise reliably, there is a reasonable cost. Fees vary depending on the scale, but it costs millions to tens of millions of yen to complete the system.

Packaged software is to build a system based on software that has been shaped to some extent. At the cost of being relatively cheap compared to bespoke, it is less customizable than bespoke. If you choose the wrong package, there is a risk that you will end up with a system that does not fit your business. The charge varies depending on the scale, but it costs around 1 million yen. In addition, there are inventory management systems that can be used by paying only the license fee, such as cloud services.

 

● Points to note when considering the cost of an inventory management system

When considering the cost of your warehouse management system, you need to consider the following:

  • About initial cost, maintenance cost, running cost
  • If you have already introduced some kind of system, can you cooperate?
  • How many additional steps are needed
  • Appointment of the person responsible for system implementation
  • Operation system after introduction

Of course, we have to think about the cost of the inventory management system itself, but we also have to think about the labor cost that is incurred by introducing the system.

In an inventory management system, there are not many people who can use it without support even if only the system is provided. It is necessary to consider the education cost for the staff in charge to master it in the labor cost. With that in mind, it is wise to pay an estimated cost in advance and treat it as a basis for deciding on system introduction.

 

● What is cost-effectiveness in an inventory management system?

When considering the introduction of an inventory management system, it is best to analyze the situation within the company and consider cost-effectiveness. If you introduce it without planning, you may lose money. For example, it is necessary to proceed with the examination in consideration of the following.

  • Working hours for warehousing and delivery
  • Costs incurred due to disposal loss and inspection mistakes
  • Loss due to missing items or omission of orders
  • Worker’s time cost

In most cases, the purpose of introducing an inventory management system is to solve problems. Therefore, when you are wondering whether to introduce it in a company, it is important to first identify the part that is a problem in inventory management. Identifying issues makes it easier to choose what features to introduce later and reduces the cost of unnecessary features.

First, give an estimated cost, and if it is a cost that can be introduced reasonably, make a plan for the introduction. In addition, it is difficult to manage with an inventory management system alone, and in some cases, it may be difficult without an analog method. It is also important to determine which business you rely on for your warehouse management system.

 

Minimum items required for inventory management

When introducing an inventory management system, it is necessary to make the system understand at least the following items.

  • In-stock items
  • quantity
  • place
  • Date of inventory processing

If you know what kind of item, how many, where, and when it came in, it is possible to operate inventory management at a minimum. To manage all products thoroughly, it is essential to know the inventory items. By understanding the items, you can solve problems with customers and defective inventory. And if you know where it’s placed, it’s easy to visually check that it’s in stock exactly as the numbers indicate. In addition, knowing when it came in can help you find the cause of the problem.

However, if only the above basic functions are incorporated, it will not cost a lot, but the inventory handling status will always differ from company to company. Even if you simply introduce an inventory management system to improve work efficiency, it will not be sufficiently cost-effective if it does not fit. It is important to always simulate in advance, firmly identify the functions that you need, and build an inventory management system that suits them.

 

Common features of inventory management systems

Some of the most common features of a warehouse management system are:

  • QR code issuance function
  • Appropriate inventory management function
  • Multiple base management function
  • Receipt / shipment inspection function

 

● QR code issuance function

As the name implies, the QR code issuance function is a function that issues a QR code used for management.

In the past, inventory management was often done by recording on a notebook called a shelf label and sometimes forgetting to fill it in. However, if you manage digitally with a QR code, you can significantly reduce human error. The method of adopting a barcode (one-dimensional code) is not bad, but since it is a two-dimensional code of QR code, it is easy to record a lot of information, and if the function is expanded, multiple items such as production lots can be easily done. It can be confirmed.

 

● Appropriate inventory management function

Product shortages are not profitable and can damage the brand image of a company or product.

The appropriate inventory management function is a function required to manage the minimum inventory quantity that does not cause shortages. I will omit the detailed calculation method of proper inventory, but this function makes it easier to manage products so that they do not run out of stock. In addition, having excessive inventory often causes deterioration of products and pressure on storage locations, which often leads to disadvantages for companies. The proper inventory management function is useful for preventing product shortages and excess inventory.

 

● Multiple base management function

The multi-site management function is a function used when the expense production system is installed across multiple bases and is often used mainly in the relationship between the parent company and the subsidiary. Therefore, it is not necessary to hire small and medium-sized enterprises with few bases. With this feature, one system can be used to settle expenses for multiple companies, centralizing data. It is easy to use, low cost, and convenient, and it is possible to share and browse detailed data on expense settlement. In addition, you can settle expenses and request payments outside the group companies, and you can improve the efficiency of application work.

The larger the company, the easier it is to exert a large effect. In some cases, if you set up an information subsidiary that operates this expense settlement system and create a mechanism to do it for the entire group, the burden on each company will increase. It is possible to reduce it. If you are not such a large group company, it is quite possible that you will not benefit so much from implementing it. First of all, try simulating what will happen if you introduce it, and if there are advantages in terms of both business and cost, you should consider introducing it.

Inventory management system

 

● Receipt / shipment inspection function

The receipt/shipment inspection function refers to an inspection system that makes it difficult for mistakes such as human error to occur when inspecting whether receipt/shipment is performed properly. At the time of inspection, problems such as misunderstandings and incorrect shipments due to visual inspection may occur. However, if the receipt/shipment inspection function is introduced, inspections can be performed using barcodes and QR codes, reducing mistakes in shipping mistakes and shortening shipping time.

In addition, the location of each product can be displayed in the inspection list, so inspection is possible without hesitation. If you register the product for immediate delivery in advance, it is convenient because the other party who shares the information will only bring it. The receipt/shipment inspection function has many functions related to such inspection, and how to customize the function can be changed depending on the situation of the company.

 

How to choose a system company that can be entrusted with the development of an inventory management system

If you can develop an inventory management system in-house, you can cut costs. However, few companies have a development environment in-house, so in most cases, we will ask a system company. At that time, the following methods can be mentioned as a method of selecting a system company.

  • Make an estimate and weigh costs and features across multiple companies
  • Find a company with a track record of development in the same industry and scale
  • Use matching service

 

● Make an estimate and compare costs and functions with multiple companies

Ideally, at least multiple companies should get a quote and select a system company before asking a system company. If there is only one company that gives a quote, there are many cases where “another system company was better” after requesting. Before requesting a quote, let’s clarify the priority of “what functions are required for the system” so that the cost can be calculated more accurately. After that, please make a quotation from multiple companies and compare them.

 

● Find a company with a track record of development in the same industry and scale

The best way to request system development with peace of mind is to ask a system development company that has a track record of providing inventory management systems to companies in the same industry or size as your company. Of course, it is important to give priority to cheapness, but if something different from what you think is completed and not usable, it will be a wasteful cost. To complete a reliable inventory management system, it is ideal to select a company that has a track record of development in the same industry and scale as much as possible.

 

● Use matching service

If you want to find a system development company that fits your company, we recommend using a matching service. In addition to inventory management, more and more companies are offering matching services to make it easier to request system development companies to introduce their business systems. By providing the matching service online, it is easier than ever to request system development. Since you can request a quote just by filling out a dedicated form, it is the best service for companies that do not have the know-how to outsource system development.

 

Improving efficiency by introducing an inventory management system

This time, I explained in detail the cost market of the inventory management system and the required functions. Companies that are good at developing inventory management systems are introduced on a separate page, so if you are a person in charge of companies considering system development, please refer to this.

An inventory management system is a system required to reliably reduce mistakes in inventory management operations that are prone to human error. The quantity and location of each product and the date of receipt and shipment can be clarified to improve the efficiency of inventory management work. In addition, if the function is further expanded, more detailed information can be investigated, so it will be possible to reduce mistakes to almost zero. If you are having trouble with your warehouse management business, please consider introducing an inventory management system after identifying the business issues.

If you ever want to know about similar things, check out the Facebook page Maga Techs_

 

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